Policy Approach

Federal Government Revenue – Breakdown

In the budget for 2011/12, the federal government committed to raising over $320 billion in revenue. The full breakdown of where they plan to receive this money from is shown below. Of note is the fact that income tax accounts for the biggest proportion of budget revenue – just under 50% of the total revenue base. A long way behind, company tax will account for around 25% of total government revenue during this fiscal year. 

For the sake of comparison, below you will see the equivalent graph for the 2007/08 Budget.  This was the final Budget handed down by the Howard/Costello government.  You will see that, in general, the estimated revenue figures for the 2010/11 Budget are higher than the figures from the this year.  These changes were mainly due to strong employment growth and high company profits, both of which were expected when the Budget was handed down in May 2010.  It is interesting to note that income tax collections have increased at a much faster rate than company tax collections.  This is because the unemployment rate has remained relatively low, while company profits have remained relatively stable (and in many cases have fallen) since the global financial crisis.  Also of note is the fact that sales tax (predominantly the GST) appears in the graph above, while the coalition government chose not to include this as revenue.  This was based on the fact that the GST that is collected is distributed to the states, and so the previous government did not believe that it should be reported as revenue for the federal government.

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